FY2027 plan after the upward revision: reassessing execution in Q2

Consolidated revenue in FY2027-Q1 was ¥53,424 million, up 7.4% year on year, while operating profit was ¥4,567 million, up 106.5%, and ordinary profit was ¥5,086 million, up 94.7%. After Q1 profit exceeded its initial forecast, the company raised its full-year forecasts to revenue of ¥265,000 million, operating profit of ¥31,000 million, ordinary profit of ¥31,500 million, and net income attributable to owners of the parent of ¥26,300 million. Looking at Q1 alone, profit momentum is strong.

However, progress against the full-year forecast was 20.2% for revenue and 14.7% for operating profit, below the simple one-quarter benchmark. This does not immediately indicate a shortfall. Sanki Engineering has consistently explained that construction completion and progress are concentrated in the second half, particularly toward the end of the fiscal year. Revenue was ¥105,950 million in FY2025-H1 and ¥101,970 million in FY2026-H1. FY2026-H1 revenue was approximately 40.0% of FY2026 full-year revenue of ¥254,674 million, confirming that H1 revenue does not reach half of the full-year level.

However, the earnings presentation for Q1 also indicates that in FY2027, revenue and profit are expected to increase from Q1 through Q4 without being concentrated in a particular quarter. Rather than attributing the shortfall in progress solely to the usual seasonality, it will be important to see which projects are recognized as revenue in H1 and the profit margins achieved as they progress. Whether operating profit can exceed the FY2026-H1 result of ¥6,541 million while maintaining the full-year forecast of ¥31,000 million will be the basic test at the next results announcement.

In FY2027-H1, the four items to review together are cumulative H1 revenue, cumulative H1 operating profit, order intake, and orders carried forward at the fiscal year-end. In particular, if only revenue increases while profit progress lags, the improvement in profit margins seen in Q1 may have been temporary. Conversely, if both FY2026-H1 revenue of ¥101,970 million and operating profit of ¥6,541 million are exceeded and the full-year forecast is maintained, confidence in the plan after the upward revision will increase.